Jury out on what NDP win means for business
Notley could help revive stalled pipelines, some observers think
Somehow, it seems fitting that I spent the most pivotal election night in recent Alberta history watching the poll results flow in from a sofa in Windsor, Ont., 3,000 kilometres east of Edmonton.
After all, Canada’s most southerly major city has long been a New Democratic Party stronghold — a big-union factory town that generally views conservatives of any stripe with disdain.
So when Alberta NDP premier-designate Rachel Notley and her orange wave obliterated the province’s 44-year-old Progressive Conservative dynasty last Tuesday, I’m sure cheers erupted in more than a few Windsor households. Not surprisingly, shell-shocked investors showed less enthusiasm, dumping their oil and gas stocks and clipping more than seven per cent off the Toronto Stock Exchange’s capped energy index over the next two days.
Their rush to the exits may have been influenced by former CBC host and investment fund exec Kevin O’Leary, who lamented Alberta’s sudden transformation from the “shining light of capitalism” into a “socialist bog.” Agree with him or not, you have to admire O’Leary’s gift for catchy sound bites.
Now that the shock of the NDP’s stunning victory and the Tories’ dramatic implosion is fading, however, more sober-minded, less incendiary assessments are slowly starting to emerge.
The big hope among business types — and it’s still just a hope, in these early days — is that Notley will reveal herself as a pragmatic centrist who can work in a constructive, collaborative fashion with Alberta’s beleaguered energy industry.
In other words, this more upbeat view casts Notley as a socially progressive but fiscally responsible leader in the mould of former Manitoba premier Gary Doer. Now the Harper government’s ambassador to the U.S., Doer led his province to a decade of balanced budgets.
Since he was named to his current post in 2009, Doer has been one of the oilsands’ biggest and most effective boosters, even if the Obama administration has continued to block the long-proposed Keystone XL pipeline.
“For the business community, Rachel Notley’s influences first and foremost will be other prairie NDP governments, in terms of reaching out to the business community and creating a prosperous environment,” says Brad Lavigne, a former campaign director for the federal NDP who now works for Hill+Knowlton.
“Already on her first day following the election, she had one message and that was to the business community, and it was that she seeks a collaborative relationship. That’s consistent with what she said throughout the campaign.”
Corey Hogan, who chaired the Alberta Liberal party’s 2012 election campaign and also works as a consultant with Hill+Knowlton, likewise sees Alberta’s new leader as a potential ally for the energy industry, which has been unable to win the support needed to build new oil pipelines.
“There’s an old saying in politics that only Nixon could go to China. Because he was a right-wing Republican he could say, ‘Look, I’m not soft on communism, so when I sit down with them it’s OK,’ ” he says.
“In the same sense Notley will probably be selective with which projects she supports, and that’s more likely to afford her the social licence for projects she does support. So when she goes to neighbouring provinces and says ‘Guys, this pipeline is OK, it’s going to do a lot of good,’ that is going to carry some currency with groups that the previous government didn’t have.”
Alan Ross, a partner at Borden Ladner Gervais in Calgary who works with energy sector clients, echoes those views.
“Her indicated support for the Energy East and Trans Mountain (pipeline) projects suggests a knowledge of, an understanding of, the Alberta energy industry and a moderate approach,” Ross told The Canadian Press.
If Notley’s NDP government moves ahead on a more proactive climate change policy, especially if it’s done in tandem with other provinces, that will “make it more difficult to hold up Alberta as the bogeyman of Canadian Confederation,” he adds.
“To the extent an approach on pipelines could be augmented by a climate change policy that works for both industry and governmental interests, it may well cast Alberta in a more favourable light with respect to potential pipeline development, even up to and including Keystone XL.”
Maybe so. But Notley has yet to spell out how her government plans to address the issue.
Meanwhile, the NDP’s other campaign promises — including plans to hike corporate taxes to 12 per cent, boost the minimum wage to $15 per hour, launch another review of energy royalty rates, and increase homegrown refining of bitumen — are sure to remain highly contentious as long as oil prices stay low.
What’s more, environmentalists aren’t likely to change their tune on pipeline projects, even with a charismatic, socially progressive NDP premier leading Alberta.
“No doubt New Democratic greenery would help, but in my opinion it’s marginal,” says Gordon Gibson, a senior fellow with the Fraser Institute and former leader of the British Columbia Liberal party. In an email, he lays out his views on the barriers Notley will face.
“The opposition to pipelines here includes greenhouse gas emissions from the oilsands (not much anyone can do absent sequestration); opposition to oil companies (could be helped by an NDP campaign as to how valuable this is to the economy); native fears of spills into salmon streams (highly unlikely but received wisdom); and absolute hardline opposition from natives and perhaps a majority of British Columbians to tanking out bitumen or (diluted bitumen),” he notes.
“The latter could be largely solved by a refinery either in Alberta (highly costly) or, more cheaply, on the B.C. coast. This could happen if governments get behind it, but Alberta’s best current bet, in my view, is (Transcanada’s proposed) Energy East pipeline.”
Only time will tell how Notley navigates these issues. But one thing is clear. Her government’s popularity will depend heavily on restoring Alberta’s struggling economy back to health. Let’s hope she is successful.